Renewables could dominate the world electricity market in 15 years

People stand on the
world's largest solar-powered boat in Cancun December 8,
2010.REUTERS/Gerardo
Garcia

Renewable energy could surpass coal, nuclear power, and natural
gas as the world’s largest source of electricity within only 15
years, according to a new report from the International
Energy Agency.

The report was published to provide a backdrop to the current
state of affairs in energy markets ahead of the international
climate negotiations set to take place in Paris in December.

The IEA noted that economic growth is starting to “decouple” from
energy – global GDP expanded by 3 percent in 2014 but emissions
stayed flat.

That puts the world at an interesting crossroads. A peak in
global greenhouse gas emissions is starting to come within sight,
but the world is not doing nearly enough to head off the worst
effects of climate change.

As a result, much anticipation and excitement surrounds the
upcoming climate negotiations in Paris. As countries start
submitting their individual nationally determined contributions
(INDCs), or pledges that individual countries issue detailing
their plans to reduce their emissions, we can get a clearer
picture of what the future might look like.

For example, the U.S. plans on cutting greenhouse gas
emissions by 26 to 28 percent below 2005 levels by 2030. The EU,
on the other hand, is much bolder, not only in its headline
number but also in its baseline: a 40 percent cut from 1990
levels. Plans from other countries are starting to trickle in.

If the INDC plans are acted upon, they could result in a vastly
larger global economy by 2030 that burns a lot less fossil fuels.
Global GDP could nearly double over the next 15 years, rising by
88 percent. At the same time, carbon emissions from energy rise
just 8 percent, a remarkable achievement.

Another potential development is the fact that renewable energy
could become the world’s largest source of electricity by 2030,
moving past all the major conventional sources of electricity
that we have known during the modern era: coal, nuclear power,
and natural gas. That is no small feat.

A
gas flare is seen at an oil well site. Gas flares are created
when excess flammable gases are released by pressure release
valves during the drilling for oil and natural
gas.Getty Images/Andrew
Burton

Still, the projections are
amazingly underwhelming.

At a time when global emissions
need to peak and decline if there is to be any reasonable
scenario in which the world stays below its stated 2 degree
Celsius target, carbon emissions actually continue to rise for
another decade and a half? Much more will be needed.

The IEA says that burning through the remaining carbon budget –
the amount of greenhouse gas pollution that could be emitted into
the atmosphere while still keeping warming to 2 degrees Celsius –
will hardly be changed by the plans laid out by countries going
into the climate talks in Paris.

Given the INDCs so far – which include the U.S., the EU, Russia,
Mexico, but notably not China – the world blows through its
carbon budget by 2040, a mere 8 months later than if none of
those countries pledged to do anything at all. Put another way,
the carbon reduction plans appear to be a rounding error over the
long-term. Even if they can be fully implemented – a big if –
they will be far from enough.

Of course, the inroads made by renewables could be accelerated if
global subsidies for fossil fuels were scrapped. The IEA notes
that carbon markets impose an average price on fossil fuels at
about $7 per tonne of CO2, but that is swamped by subsidies for
coal, oil, and gas, which amount to the equivalent of $115 per
tonne.

David Yanez adjusts a
6-metre (20-ft.) prototype of a wind turbine without blades in a
countryside at the small village in Gotarrendura, Spain, June 2,
2015.REUTERS/Sergio
Perez

In other words, renewables are indeed starting to undermine the
economic case for fossil fuels, but these fuels still enjoy
significant financial assistance from governments around the
world, which will extend the fossil fuel era for decades to come
if they are not overhauled.

The IEA does offer a proposal to actually meet the 2 degree
target, a plan that has five main parts: